In this episode, I talk to Erik Vorhees of ShapeShift.io about the new ShapeShift iOS application, available now in the Apple Store. We feature the song “Give me a Sign” by Bitcoin-supporting band 22Hertz out of Ontario. And for the large part of the episode, I interviewed John Light, host of P2P Connects Us and […]

And the biggest firms on Wall Street are employing all sorts of tactics to defend their top line from invasions taking place on both coasts.

Virtually every big bank has invested in startups. Increasingly, seed-stage ventures and accelerators have been formed as Wall Street firms snap up a piece of hundreds of pre-IPO companies.

After launching its first finch incubator in Tel Aviv in 2013, and by the end of the next year Citi Ventures has expanded accelerator efforts to Spain, Germany, Singapore, Brazil and the US. Barclays Accelerator operates in two countries, in part thanks to TechStars’ management expertise. Even Capital One has an accelerator of its own, Capital One Labs.

Wells Fargo has backed a handful of startups through its accelerator. One has the potential to help big banks get slimmer on staffing. Kasisto is a platform for financial institutions providing clients virtual personal assistants. And Bank of America has sponsored tech accelerators in New York, London and Charlotte.

Sometimes banks wind up jointly investing in the same startup, like Motif Investing, an online broker. Both JP Morgan and Goldman Sachs backed that platform. JP Morgan also backed Square, along with numerous big banks’ investment arms (Morgan Stanley joined in that investment, as well). And even Morgan Stanley, which has had a relatively muted presence in the investing scene, has struck deals to back companies like messaging platform Perzo and Eris Exchange. Eris sells interest rate swap futures.

Some view it as Wall Street finally acknowledging that customer acquisition requires their not being deaf to Silicon Valley. Others think it is less about changing culture than it is about suppressing competition.

“Because we’re a not a retail bank, we view all disruption opportunities as being great,” Reetika Grewal of Commerce.Innovated said to Business Insider. Commerce.Innovated is an accelerator run by Silicon Valley Bank and MasterCard.

But not everyone does. We spoke with a number of players in the startup space, as well as Wall Street veterans. Here’s what they had to say:

“Banks are looking towards earlier stage investments and opportunities,” says one investor who has worked with banks on deals. “Even if they don’t take equity in the companies but rather use the accelerator as a way to understand the innovation going on outside of their walls, it's totally worth it. The investment is relatively minuscule in relation to the insight they'll gain."

“One of the reasons some firms may be eager to do more early stage deals is that banks are being regulated out of building larger stakes in pre-IPO companies,” a banking sector source said. He referred to this in the broader scope of post-crisis regulation like the Dodd Frank Reform and Consumer Protection Act. It requires that banks either fund outside investments entirely with their own money, or with three percent of client funds. That, the source said, makes it very difficult for banks to participate in late-stage investing.

One investor notes that part of banks’ strategy of backing early-stage companies is to reap future business. “[Banks] have always tried to service early tech companies as much as possible as lead generation,” one Silicon Valley source said.

"There’s this appetite for credit that banks can’t satisfy,” the investor said. "Banks either need to build competing products or invest in new ones.”

“Banks are finally admitting they don't have it all figured out,” says another investor in the space.

During his talk at IDX Derivatives Expo in London, Alex Batlin, UBS Bank’s chief Information officer for innovation (CIOI) shed some light on what the financial institution has been working on in their innovation lab: smart-bonds on the Bitcoin blockchain. International Financing Review Asia (IFR Asia) reported that the smart-bonds were described by Batlin as bonds where “risk-free interest rates and payment streams were fully automated, creating a self-paying instrument.” “The key attraction is that there is no middle or back office, and no registry, so clearly a major impact on costs,” said Batlin. The Innovation Lab Smart-bonds are one of the first publicly confirmed technologies the Swiss banking giant is said to be exploring since the launch of The […]

Bitcoin Association Switzerland reports that, according to the Swiss Federal Tax Administration, no VAT applies to bitcoin in Switzerland. The transfer of bitcoin doesn’t constitute delivery of goods or services, and therefore it’s not subject to VAT. “This is the most reasonable way to classify bitcoins in the context of VAT, and we are fortunate that the tax administration agrees with our view,” says Luzius Meisser, president of Bitcoin Association Switzerland. “Bitcoin is a currency, and thus should also be treated like a currency.” In February 2014, a group of three Swiss Bitcoin organizations jointly wrote a formal inquiry to the Swiss Federal Tax Administration to clarify the legal situation of bitcoin with regards to VAT. The tax authority replied […]

D-CENT (Decentralized Citizens ENgagement Technologies) is a Europe-wide project to create digital tools for direct democracy and economic empowerment. The project, which received €1.9 million funding from the European Union under FP7, wants to create a decentralized social networking platform for large-scale collaboration and decision-making. The project team includes companies, universities and high-profile organizations such as the European Research Consortium for Informatics and Mathematics (ERCIM), the French CNRS, and NESTA, a U.K. charity dedicated to foster socially relevant innovation with activities ranging from early stage investment to in-depth research and practical programs. D-CENT announced that it will design structurally sustainable money systems via the creation of a digital ecosystem of blockchain-enabled complementary currencies to use in parallel with conventional ones. […]

Just as it seemed like the dust was settling around the New York Department of Financial Services (NYDFS) BitLicense regulations released last week, Erik Voorhees of ShapeShift.io raised new criticisms of the NYDFS, calling them “Orwellian” and making comparisons to North Korea. NYDFS’s Matt Anderson was not surprised, telling Bitcoin Magazine: “We always recognized that there is going to be some part of this community that is against even pretty standard financial regulatory oversight measures, such as anti-money laundering controls and other consumer protections. That said, one digital currency company has already received a license from NYDFS and a number of others have stated they intend to seek BitLicenses shortly.” Although ShapeShift.io is a Switzerland-based exchange, it has cut off service to it’s New York State customers […]

Bitcoin users do not have to pay value added tax (VAT) on bitcoin in Switzerland. The Swiss Tax Administration (ESTV) has announced there will be no VAT on bitcoin transactions, according to Bitcoin Association Switzerland. The news brings hope not only to bitcoin users in Switzerland, but worldwide. Switzerland has a global reputation for financial […]

The trend of Bitcoin and ISIS being related in the same story continues as Ali Shukri Amin, a high school student from Virginia, pleaded guilty Thursday for, among other things, teaching ISIS supporters how to use the popular crypto-currency Bitcoin. Ali Shukri Amin of Alexandria, Virginia, pleaded guilty Thursday in federal court to providing material […]

Daniel Schwartzkopff, founder of BetVIP, the world’s first licensed bitcoin sportsbook and casino has concluded a management buy-out deal for the company. Schwartzkopff said BetVIP’s aim was to bring “transparency and legitimacy” to a sector that had been “marred with controversy and fly-by-night operators”. He added that BetVIP provided this, and more, with a public […]

Navigating the web of government regulation, and effectively implementing the procedures governments actually call for, is one of the biggest hurdles a new financial company faces in the modern age. As global terrorism grows an increasingly common theme internationally, concerns over money laundering and funding potentially shady cells must play a daily role crafting policy […]

Digital Gold author Nathaniel Popper, who wrote his first Bitcoin article about the Winklevoss Twins‘ involvement in it, interviewed the twins earlier tonight in New York at an event hosted by GeneralAssemb.ly. Gemini Weeks Away The burning question among the Bitcoin community was on the progress of Gemini, the brothers’ exchange, which will be based […]